|Logo Shaped Like Upturned Penis, What Do They Want?|
To say a few conflicts cloud Amazon's future would be an understatement. The company has ravaged America's retail landscape destroying jobs while at the same time enjoying a slew of taxpayer subsidies. But several of the cozy arrangement they have enjoyed over the years pale in comparison to the deal Amazon is now trying to push through Congress. The technology giant which is no stranger to sweetheart deals that line its pockets at taxpayer expense is quietly moving in a direction that is destined to create even more controversy. Amazon is on the verge of winning a multibillion-dollar advantage over rivals by taking over large swaths of federal procurement. This makes it increasingly difficult to ignore that the company's CEO Jeff Bezos also owns one of America's leading newspapers, the Washington Post, through which Bezos has embarked on a mission to shape public opinion. When you couple such a voice with a company so deeply involved with discovering and archiving detailed files and information about individuals and the politicians across America you command a great deal of power.
We all know Amazon started out as an online retailer touting low prices and exploited brick and mortar stores across the land but for some reason, the federal government cannot stop giving Amazon, even more, advantages over the stores that line the streets of our communities. One example of how Amazon has found ways to have the government subsidize its operations is how the U.S. Postal Service which has lost $60 billion since 2007 handles last-mile shipping for two-thirds of Amazon’s deliveries and this extends to even delivering on Sunday. This has resulted in overtime for workers and a good incoming revenue number on the USPS’s balance sheet, but in truth, it has been a financial bonanza for Amazon. According to media reports, USPS delivers Amazon packages for $2 each even though it costs USPS $3.46 per package to make these deliveries. And that’s before you get into the $200 million three years ago for 270,000 handheld scanners to process the packages or the $5 billion or more to replace USPS vehicles with those better suited to deliver Amazon’s packages.
Congress has started down the path to change the federal purchasing plan that would result in Amazon’s most lucrative government handout yet. The language buried in Section 801 of the House-passed version of the National Defense Authorization Act would in effect move Defense Department purchases of commercial off-the-shelf products to online marketplaces. The House Armed Services Committee Chairman Mac Thornberry, argues it is needed to save money over the burdensome current system and that some IT equipment could be purchased more cheaply on the open market than through the GSA’s “schedules.” The plan calls for developing an online marketplace platform through which federal agencies can buy products such as paper clips, bottled water, computers, office furniture and more in the same way any business would.
The legislation calls for a platform designed to “enable government-wide use of such marketplaces” which rules out all small players unless they employ a procurement and supply management firm big enough to serve the entire U.S. government by offering multiple suppliers for a massive number of products with constantly changing selection and prices. With all Amazon's influence, it is not an accident that Amazon Business is the company best positioned to exploit what is basically monopoly control over a great deal of the $53 billion in federal purchasing for the commercial supplies bought through no-bid contracts. As to whether this becomes law in the future the fact that Amazon got it through the house should cause us great concern and is proof of their ability to manipulate Washington All this reeks of corruption, a major shift in power, and sets up opportunities for abuse not to mention massive control over suppliers.
Even the suggestion of a pilot program is just another way for Amazon to wedge its foot in the door. It is important to remember by simply providing the platform necessary for companies to sell through to their current customers Amazon would extract money from those third-party sellers and collect billions of dollars annually. Typically it receives 15 percent to 20 percent of the proceeds from such sales, which means a huge revenue stream for Amazon for doing basically nothing while vendors are forced to cough up as much as half their margin. This would prove devastating to many small businesses. Amazon would also get an enormous amount of data on agencies which they could then use to identify top competitors and drive them out of the marketplace with increased fees or other rules changes. And it means many discounts that are normally negotiated for bulk rate purchases would flow not to the government and taxpayers but would be diverted into Amazon’s pocket.
The online marketplace provision, which still has to get through a House-Senate conference but with all the power and lobby power Amazon currently holds it has push. It must be noted that as head of Amazon Business’s public sector division, the company hired Anne Rung, who ran the Office of Management and Budget’s Office of Federal Procurement Policy until fall 2016, this is another way of saying the "top purchasing official" in the United States. The hire is a boon to Amazon, which gains an experienced government insider who can help connect the Seattle-based company with huge market opportunities in state and federal e-procurement applications. Considering how Amazon operates it should not come as a surprise they chose a "government insider" to guide them, also we should not be surprised at the significant ramp-up of Amazon Business which only started in 2015 and already has 1 million customers and $1 billion in sales. Recently Amazon introduced Amazon Business Prime, a $499 membership that comes with free two-day shipping for its business-to-business products.
This has tanked the stock prices of its main industrial supply competitors, Fastenal and W.W. Grainger. Regardless of how this plays out on the national level, Amazon has been moving at the local level where in January, the company won a contract with U.S. Communities, a coalition of 90,000 local governments. Ironically after Amazon famously spent years denying the payment of sales tax to local governments it now is a major supplier of local government office supplies. Clearly, Amazon will not be happy until it is the go-to source for all online office supplies and other goods. For those who have seen the damage Amazon's predatory practices have done to so many companies, it is difficult to see this as a good thing.
"Just Say No" was an advertising campaign, part of the U.S. "War on Drugs" during the 1980s and early 1990s, it was aimed at discouraging children from engaging in illegal recreational drug use and practices that would end up hurting them. The campaign focused on the simple idea of firmly rejecting the allure of the drug culture by offering various ways of saying no. Eventually, the scope of the campaign expanded to cover violence and premarital sex as well as drug use. With a company logo resembling and shaped like an upturned penis Amazon almost screams that its goal is to screw us all, with this in mind, I like many other people have decided to just say NO!